On 17 April 2008 competition law hit the headlines in the UK when the Office of Fair Trading (OFT) announced that it had issued a 'Statement of Objections' (SO) against 112 construction firms in England and Wales, alleging engagement in 'bid rigging' activities.

A week later the OFT announced that it had issued another SO, this time alleging that certain tobacco manufacturers and retailers have engaged in unlawful practices in relation to retail prices for tobacco products in the UK.

What is a 'SO'?
A SO gives notice of a proposed infringement decision by the OFT under the Competition Act 1998. The recipients can make written and oral representations in response to the case set out by the OFT, which the OFT will consider before any final decision is made.

Issuing an SO is the culmination of a detailed process of fact-finding by the OFT. That fact-finding process can take months or years – the construction SO originated from a specific complaint in the East Midlands in 2004.

What is a 'dawn raid'?
As part of that fact-finding process, the OFT can – and often does – exercise its powers to conduct inspections of business premises – popularly known as 'dawn raids'.

Under the Competition Act 1998, the OFT can conduct an investigation where there are reasonable grounds for suspecting that UK or EU competition law has been infringed.  It has specific and detailed powers under the Act to enter business premises to obtain documents relevant to the investigation.

Such inspections are usually unannounced. Often, a business will only find out that it is under investigation when an OFT team arrives to conduct an inspection – usually at the opening of business hours (hence the expression!)

I’ve been raided. What do I do?
The next steps for every business are: (a) get legal advisors on site as quickly as possible – either the in-house team or external counsel, and (b) co-operate with the OFT – failure to comply with an OFT requirement made in the context of an investigation can be a criminal offence. That said it is also critical to know what information and documentation you are legitimately entitled to withhold – that is where we come in!

Our competition law team advises on competition issues of all kinds – including dawn raids.  We also deliver tailored compliance policies and training programmes that help business to reduce the risks of coming under scrutiny in the first place. Such pre-emptive action can seem unnecessary – until the OFT arrives, that is.

For further information, please contact Toby Tyler via email or telephone on 01865 262614.